Acer back in profit, but barely

After three consecutive quarters of net losses, PC maker Acer has reported a profit in this year's first quarter on better control of costs.

Revenue, however, was still down by 17 percent year-over-year

By
Michael Kan
| 08 May 2014

After three consecutive quarters of net losses, PC maker Acer has reported a profit in this year's first quarter on better control of costs.

The recovery was, however, very small with the company generating NT$1 million (US$33,000) in net profit during the period, Acer said in its earnings report on Thursday.

The first quarter profit was still down from the NT$515 million Acer recorded a year earlier. But it's a positive sign for a company that's been hit hard by the shrinking PC market.

The Taiwanese company, which was best known for its notebooks, was hit as consumers drifted to tablets and smartphones. Microsoft's Windows 8 operating system did not help, and Acer's own products have struggled to re-energize sales.

In response, the company initiated a major overhaul of its business in November, eventually hiring a new CEO and laying off employees to control costs.

Earlier this week, Acer co-founder and Chairman Stan Shih said he was satisfied with the company's new direction, and expected the PC maker to start breaking even soon.

But even as the company reported better earnings in the first quarter, its revenue was NT$76.7 billion, down 16.6 percent year-over-year. In the first quarter, Acer's PC shipments saw a year-over-year decrease of 20 percent, according to research firm IDC.

To generate more revenue, the company is focusing less on PCs and more on mobile devices, including wearables. Last month, Acer unveiled its first smartband called the Liquid Leap, which works with a smartphone to monitor a user's health and fitness information.

The company is also making software and services a centerpiece of its revival. As part of that strategy, Acer wants its products to include a private cloud service on board that consumers can use to store information remotely. Ideally, the company will bundle in paid features into the cloud service as a way to generate additional revenue.